Site of the Month- Check out http://valuediscipline.blogspot.com/
They had a pretty good writeup several days ago on MMM. From what I can tell, this company generates nearly $4.5Bln in normalized cashflow from operations, approximately $3.5Bln actual cashflow (due to working capital expenses) and nets out to $2.5Bln actual free cashflow per year. This assumes continued R&D and growth expenditures, however on lower growth assumptions this company trades at 16x free-cashflow in a low growth scenario, for a 6.25% free cashflow yield. While not the sexiest yield in the world, people have historically paid a lot more for this company's earnings...which have continued to increase in the face of a flattish/declining stock price over the past few years. The chart below tracks the company's stock price (white line) vs. its P/E (green line). MMM is under-levered ("AA" credit rating) and appears to be somewhat cheap on an absolute basis, but very cheap on a relative basis (versus its historical trading range). It is difficult to gauge competitive threats and how much LCD pricing will hurt some of their film divisions, so I am just buying a half position and watching it. This is more of a long-term IRA stock.